March 1, 2019 - 1:00 pm
March 1, 2019 - 2:15 pm
AddressB33 - Trifacultaire, Liège View map
The LCII cordially invites you to its brown bag seminar on “Competition Between Integrated Incumbents and Platforms” presented by Axel Gautier (ULiege) on Friday, March 1st.
Time: Friday March 1st, 2019 at 13.00PM-2.15PM
Location: LCII room
Abstract: In many sectors, platforms or matchmakers are competing with vertically integrated incumbents. Uber competing with taxi companies and AirBnB competing with hotels are certainly the two preeminent examples. In this paper, we model this process of competition between a platform and a vertically integrated incumbent. A striking feature is that the platform competes at two levels. Firstly, the platform competes for the market to affiliate users to the platform. Affiliation is not only a way to gain market shares but also to reduce costs as platforms exhibit strong economies of scales. Secondly, the platform competes in the market with the incumbent for service provision to the affiliated customers. We construct a dynamic model that integrates these two levels of competition.